Latham Group’s IPO Is Coming Soon, and Its Stock Looks Promising
Latham Group (SWIM) has revealed the terms for its IPO. Is its valuation reasonable, and should you buy the stock?
Apr. 21 2021, Published 10:14 a.m. ET
On April 14, Latham Group revealed the terms for its IPO. The company plans to raise $400 million in the offering. Is Latham Group IPO stock a good buy for investors? What can investors expect after the IPO?
Latham Group designs and manufactures in-ground residential swimming pools. Appropriately, the stock is set to debut on the Nasdaq under the ticker symbol “SWIM.”
Latham Group sells in-ground swimming pools and pool liners.
Latham Group builds in-ground residential swimming pools from fiberglass for customers in the U.S., Australia, and New Zealand. The company’s main offerings include in-ground swimming pools, pool covers, and pool liners. In 2020, Latham sold more than 8,700 fiberglass pools in the U.S. Latham has already received $200 million from investors including Wynnchurch Funds and Pamplona Funds.
Latham Group’s IPO date and stock price are uncertain but could be imminent.
Latham Group hasn’t officially revealed an IPO date yet, but various reports suggest that it could come as early as Apr. 23. The company plans to offer 20 million shares in the IPO, which will likely be priced in the range of $19 to $21 per share.
If Latham prices at the midpoint of that range, the company would have a fully diluted market value of $2.4 billion. The net proceeds from the offering will be used to repay outstanding debt and for general corporate purposes.
The listed underwriters for the IPO are Barclays, BofA Securities, Morgan Stanley, Nomura, William Blair, Baird, KeyBanc Capital Markets, and Goldman Sachs. Latham has granted the underwriters a 30-day option to buy an additional 3 million shares at the IPO price.
Latham Group is profitable.
In 2020, Latham Group reported a net income of $16 million compared to $7.5 million in 2019. The company’s revenue rose by 26.9 percent year-over-year to $403.4 million in 2020. As of Dec. 2020, the company had $430 million in total liabilities and $59.3 million in cash.
Latham Group’s IPO valuation
The IPO terms put the company’s 2020 price-to-sales multiple at 5.9x, for a company that is growing revenue at 27 percent, generating profits and significant free cash flow.
Latham Group’s IPO stock symbol
Latham Group stock will trade under “SWIM” ticker symbol. The stock will be listed on the Nasdaq.
Latham Group stock forecast is promising.
The outlook for Latham Group stock looks very appealing. In 2021, the swimming pool construction market size in the U.S. is expected to reach $9.5 billion, representing a growth of 2.9 percent year-over-year.
Latham Group IPO stock looks like a good buy.
Latham Group holds the number one market position in the U.S. in every product category in which it competes with regional and local pool manufacturing companies. The company has grown impressively amid the COVID-19 pandemic as the demand for residential pool amenities increased.
Latham is also poised to benefit from the expected robust growth in single-family home construction in the U.S. over the next few years. As a result, Latham stock looks like a good buy for long-term investors.
